Now that he’s in power, markets are starting to realise Trump has a lot more leeway to enact his trade agenda unilaterally than he does to act on the tax and regulatory fronts, where legislators and the judiciary will have a much greater say.

That’s causing some economists to question the wisdom of the recent run-up in stocks, which were specifically catapulted higher by bank shares rallying on the hopes of a swift erasure of the post-crisis Dodd-Frank rules.

“Given President Trump’s long-held views that the US has been losing out on foreign trade, the likelihood and consequences of a trade war are Top of Mind,” write Goldman Sachs economists in a research note. “US action on China’s currency policy and unilateral, targeted tariffs are likely, and China would respond proportionately.” Trump has hired several ex-Goldman bankers as his top economic advisers.

A look at Trump’s key economic appointments more broadly has also put investors on alert for the possibility that the US will raise tariffs on trading partners like Mexico and China, unleashing retaliation with no clear end in sight.

“The incoming administration has a protectionist bend,” says David Doyle, equities analyst at Macquarie Capital Markets Canada. Peter Navarro, an economics professor from the University of California at Irvine, has been appointed to lead a newly-formed National Trade Council. Navarro “has had an aggressive stance towards China,” says Doyle. “For example, two books he has written are entitled ‘Death by China and ‘The Coming China Wars.'”

Leaving aside the possible nightmare of an actual war, what would be the cost of a US trade war with major partners? If it escalated into a full-blown crisis, the damage would difficult to tally. These are some of the proposals Trump made during his campaign.

Economists at the Peterson Institute for International Economics gave it a try ahead of the US elections, and found a trade war would be deeply hurtful to US workers, “plunge the US economy into recession and cost more than 4 million private sector American jobs.”

Harvard economist Kenneth Rogoff offers a stark warning to the Trump administration: “The US cannot win a trade war with China, and any victory will be Pyrrhic. The US needs to negotiate hard with China to protect its friends in Asia and deal with the rogue state of North Korea. And the best way to get the good deals Trump says he seeks is to pursue a more open trade policy with China, not a destructive trade war.”